Exports record first positive growth in two years

The dollar value of exports from Emerging Asia (excluding China) grew in August by 3.1% y/y – the first expansion in nearly two years. The recent improvement in export performance owes more to the fading effects of the collapse in commodity prices on export values than a recovery in underlying demand. Oil prices, for example, were just 1.2% lower in August than they were 12 months ago. (In July oil prices were 17.9% lower than they had been a year before.) The dollar value of Asian exports should continue to recover over the coming months as positive “base effects” boost growth in the value of commodity exports. But with global demand set to remain subdued, export volumes, which matter more for GDP growth, are likely to remain weak, dragging on overall growth prospects.